This is the exchange rate per Google.

Not bad right? This is what you get when you actually try to get Australian dollars in cash.

That’s a 7% spread charged…

…and another 5% spread on the way back if I have any unspent cash. Losing 12% seems a bit harsh especially when the banks are getting a 1:1 exchange rate. After some digging, this hefty premium arises from getting the money in cash (about 3% each way) ontop of the premium that the banks already charge (another 3% each way).

There is a simple solution.

Credit cards charge a fee (2.5% in this case) for foreign-currency transactions, but they offer rates much closer to the actual exchange rate. Even after the 2.5% fee, the rate is much lower compared to the 7% on a cash exchange and there is no risk of incurring another loss on unspent cash. For a country like Australia, where credit cards are widely accepted and ATMs exist, it is probably a good strategy minimize cash carried and maximize credit card use. Given a 3-month stay, this will let me throw my money away elsewhere.